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Tigard, Tualatin to consider taxing marijuana sales

State law allows cities, counties to tax 3 percent on top of base rate of 17 percent.

PMG FILE PHOTO - Marijuana is sold at The Flowershop, a dispensary in Warren.Like many municipalities in Oregon, Tigard and Tualatin jumped out ahead of the 2014 vote in which Oregonians chose to legalize marijuana for recreational use, passing taxes on retail and medical sales.

The legal enforceability of those tax ordinances are now in question, as Ballot Measure 91 passed, giving the state sole taxing authority over marijuana, and state law now specifies a tax rate. But the law does allow cities and counties to add up to a 3 percent tax on top of the 17 percent base rate set by the Oregon Legislature, and the Tigard and Tualatin city councils are considering asking voters to do so. The new local tax would likely replace the existing, preemptive tax on each city's books.

Currently, there is only one retail marijuana store within Tigard city limits, said Mayor John L. Cook. But Tigard's ordinances and zoning allow for more, he added.

Cook's hope is to see a local marijuana tax go toward supporting the Tigard Police Department. When the Tigard City Council adopted a 10 percent tax on recreational and 5 percent tax on medical marijuana sales in 2014, it was with the stated intent to collect revenue for police.

Cities and counties throughout the state where marijuana sales are legal are making plans to refer a marijuana tax to voters this fall.

That includes Tualatin, where strict land use rules adopted in response to the passage of Measure 91 severely limit where a marijuana business could conceivably operate. The city currently has no marijuana stores or dispensaries.

City Councilor Ed Truax said Monday he sees no need for a tax.

“I am also not in favor of spending any more time or staff effort to put this on the ballot. I think this council did a very effective job of banning retail marijuana in the city of Tualatin … while being able to say that it wasn't a ban,” Truax said.

He added, “I think it is crazy what we did. But there is no place to put a shop in Tualatin.”

Tualatin Mayor Lou Ogden, a staunch opponent of legal marijuana, also said he had no interest in putting a tax proposal to voters. He noted that Tualatin already has a tax similar to Tigard's, adopted before Measure 91 passed, which has not yet been invalidated by a court.

However, other members of the seven-member council were open to the idea.

“I think that we should revise the tax to the 3 percent and go to the voters with the 3 percent,” said Councilor Nancy Grimes. She and Councilor Joelle Davis argued that the city should follow state law rather than being put in the position of possibly having to defend their existing tax down the road, if marijuana business ever comes to Tualatin.

In Tigard on Tuesday, Cook said he would prefer his city move in step with others if it asks voters for a local marijuana tax.

“I don't want to be a lone wolf on this,” he said. “I don't mind being a lone wolf, but I also would love to have a similar ordinance to every other city, when it comes to a legal challenge or anything else, because everybody else is going to be on board with it.”

City staff in both Tigard and Tualatin are expected to present their councils with proposed ballot language at their second meetings of the month, on July 26 and July 25 respectively, for consideration.

By Mark Miller
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